The Cabinet today has approved an ordinance that will impose penalties on anyone, including jail term, for possessing the demonetised Rs 500 and Rs 1,000 old notes beyond the cut-off date March 31, 2017.

The Cabinet, headed by Prime Minister Narendra Modi, has also approved an ordinance named as ‘The Specified Bank Notes Cessation of Liabilities Ordinance’ to extinguish liability of government and RBI on the demonetised notes. This has been aimed to prevent future litigations against the government.

The norms of the new ordinance

After December 30, only selected branches of RBI will accept Rs 500 and Rs 1,000 notes. But this has to be done along with a declaration why the person couldn’t submit the amount in the given timeframe.

If a person is not being able to go physically in RBI to deposit notes, then he or she can send it through an insured post along with a declaration why you couldn’t come, why you have not been able to deposit the money till now.

The penalty rules will be imposed after March 31, 2017. Punishment would be given to any person hoarding more than 10 old notes.

4-year jail term will be imposed if you keep old notes post March 31, 2017. Rs 5,000 is fine on transaction in old notes.

The ordinance on demonetisation of Rs 500 and Rs 1000 notes has been sent to President Pranab Mukherjee for his assent.

On the night of November 8, Prime Minister Narendra Modi surprised every Indian by announcing the demonetisation of Rs 500 and Rs 1,000 notes. The government had allowed holders to either exchange them or deposit in bank and post office accounts. Depositors now have time till Friday to deposit the holding in their accounts.